Tesla’s grip on the European electric vehicle market weakened sharply in July, as sales dropped by 40% compared with the same month last year. According to the European Automobile Manufacturers’ Association (ACEA), the US carmaker sold 8,837 vehicles across the EU, the European Free Trade Association, and the UK, down from 14,769 in 2024. The decline comes as Chinese rival BYD aggressively expands its footprint, achieving 13,503 new registrations last month – more than triple its performance a year earlier. BYD now holds a 1.2% market share, overtaking Tesla’s 0.8%.
The surge in BYD’s presence highlights the competitive pressures facing Elon Musk’s company, which has recently revamped its Model Y but continues to struggle against cheaper Chinese alternatives. Market analysts note that BYD first surpassed Tesla in European sales this spring, signaling a shift in consumer preferences towards affordability and practicality. The expansion of Chinese brands underscores the broader transformation of Europe’s car market, where price-sensitive buyers are increasingly embracing lower-cost electric models.
In the UK, the government unveiled fresh incentives aimed at boosting the electric vehicle sector. Two Ford models – the Gen-E and the e-Tourneo Courier – will receive the maximum £3,750 subsidy under a new scheme. An additional 26 models are eligible for £1,500 grants, provided their list price does not exceed £37,000. Transport secretary Heidi Alexander said the policy was designed to make the transition to electric “cheaper and easier for families,” while simultaneously stimulating competition, jobs, and economic growth.
Industry data also reveals that battery-electric cars accounted for 15.6% of all EU vehicle registrations in the first seven months of 2025, with more than 1 million units sold. However, hybrid-electric vehicles remain more popular, with 2.25 million registrations during the same period, driven largely by demand in France, Spain, Germany, and Italy. Despite steady growth, sector leaders stress that Europe must urgently expand its charging infrastructure and cut recharging costs to sustain momentum in the shift away from combustion engines.
Sigrid de Vries, director general of ACEA, emphasized that coordinated policies across Europe are vital to accelerating the adoption of electric vehicles. At the same time, the Society of Motor Manufacturers and Traders reported a 5.6% rise in UK car production in July, but warned that the market remains “turbulent” due to weak consumer confidence, volatile trade conditions, and heavy investments in emerging technologies. For Tesla, these challenges underline the mounting pressure to adapt quickly or risk losing further ground to more aggressive competitors.
